How a Manufacturer's Shared Service Centers Fully Automates Invoice Processing: Despite Multi-ERP Complexities

A global manufacturer of construction machinery implemented Basware’s AP automation solution for automated invoice processing to standardize processes across all business units, reduce costs, and increase efficiency. The company had centralized invoice processing within shared service centers but faced the challenge of implementing an automation solution in a multi-ERP environment. The ERP landscape of the company was diverse, with some Shared Service Centers (SSCs) working with a combination of Oracle, SAP, or Sage, and others only working with one ERP.

The initial situation

Initially, when the first Shared Service Center (SSC) was set up in the USA, the accounting tasks were moved to the SSC without standardizing the processes beforehand. The process was paper or email-based, making it extremely time-consuming.

The company also had visibility issues for the sites, for example, regarding the invoice backlog. At the time, 90% of incoming invoices were paper invoices or non-machine-readable PDFs. The quickly outdated OCR solutions that the company had in place in individual countries were not scalable because they could not be used for the smaller ERP systems or extended to other countries. To make matters worse, the employees of the various shared service centers were only trained in one or two ERP systems, so there was no way to reallocate resources to help each other out when workload suffered. This was a very unsatisfactory situation, that required a quick solution.

The remedy

The construction equipment manufacturer decided to introduce what they termed a "system of engagement" – an automated solution for invoice processing – that communicates with all ERP systems. They chose Basware's Invoice Automation solution with an integrated analytics module and some additional services, such as supplier activation. These were the company's goals associated with the introduction of our solutions:

• Standardization of processes across all business units
• Reduce costs
• Increased efficiency
• Adopting ONE system with a uniform user interface
• Less paper, more electronic data
• Reduction of manual, non-value-added tasks
• Increase in the proportion of invoices with purchase order reference
• Improve transparency (operational and KPIs)

Project implementation

After implementation, the shared service centers in the USA and Australia were the first to adopt, followed by the SSC in Northern Ireland. The advantages became apparent very quickly and are illustrated with three key examples.

• Their touchless rate (defined as the proportion of invoices that are processed without any manual intervention) is currently 70% across all SSC sites.
• Before the introduction of Basware solutions, the company received 20% invoices without purchase order reference. Since implementation this key metric has been reduced to 4%.
• Throughput times have also significantly reduced. Invoices without a purchase order reference used to take 20 days to process, but now take 5-7 days.

The results

In addition to the goals achieved above, other achievements of the project include:

• Improved transparency: invoices visible in the system within 24 hours after receipt, proving much faster with electronic invoices
• Automated key metrics/benchmark reporting
• Further process optimization with the help of the analytics module
• Share of electronic incoming invoices increased to almost 80%
• Improved distribution of workload within SSCs

The system allowed the company to change the role of the accounts payable personnel from a "data provider" to “problem solver”. By partnering with Basware, the company was able to improve its overall financial performance and streamline its operations.

More on Shared Service Centers

To learn more about how Basware helps Shared Service Centers transform and streamline their AP processes, tune in to this webinar, How to accelerate Time to Value with Touchless Invoice Processing. You can also download the 7 Main Issues Facing Shared Services Today (And How to Address Them) whitepaper or the Basware for Financial Shared Service Centers factsheet.